Recode Studios Ltd Management Discussions

Notes:

(1)Revenue from operation means revenue from sale of products & services and other operating revenues (2)EBITDA is calculated as Profit before tax + Depreciation + Finance Cost - Other Income (3)‘EBITDA Margin’ is calculated as EBITDA divided by Revenue from Operations (4) PAT is calculated as Profit before tax Tax Expenses (5)‘PAT Margin’ is calculated as PAT for the period/year divided by revenue from operations. (6) Return on Equity is ratio of Profit after Tax and Average Shareholder Equity

(7) Return on Capital Employed is calculated as EBIT divided by capital employed, which is defined as Shareholders Fund + Long term borrowing + Short term borrowing+ Deferred Tax Liability. (8) Engaged Sessions refers to total count of user sessions on our website and/or mobile application during a given period that meet user engagement parameters, such as multiple page views, minimum session duration or completion of specified user actions, as tracked through the analytics systems.

(9) Return on Ad Spend (ROAS) is calculated as Net sales of Products divided by total Advertisement & Promotion Expense and is represented in times. (10) Net Worth is calculated as total shareholder’s funds.

Explanation for KPI metrics:

SIGNIFICANT ACCOUNTING POLICIES

A. Basis of preparation of Standalone Financial Statements:

The Restated Statement of Assets and Liabilities of the Company as at December 31, 2025, March 31, 2025, March 31, 2024 and March 31, 2023, the Restated Statements of Profit and Loss for the nine months period ended December 31, 2025 and for the Financial Year ended March 31, 2025, March 31, 2024 and March 31, 2023, the Restated Cash Flow Statement for the nine months period ended December 31, 2025 and for the Financial Year ended March 31, 2025, March 31, 2024 and March 31, 2023, the Summary Statement of Significant Accounting Policies, the Notes and Annexures as forming part of these Restated Financial Statements (collectively, the “Restated Financial Information”) has been extracted by the management from the Audited Financial Statements of the Company.

The financial statements of the company have been prepared and presented in accordance with the Generally Accepted Accounting Principles (GAAP). GAAP comprises the Accounting Standards notified u/s 133 read with Section 469 of the Companies Act, 2013. The accounting policies have been framed, keeping in view the fundamental accounting assumptions of Going Concern, Consistency and Accrual, as also basic considerations of Prudence, Substance over form, and Materiality. These have been applied consistently, except where a newly issued accounting standard is initially adopted or a revision in the existing accounting standards require a revision in the accounting policy so far in use. The need for such a revision is evaluated on an ongoing basis.

The accounting policies adopted in the preparation of financial statements have been consistently applied. All assets and liabilities have been classified as current or non-current as per the company’s normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013. Based on the nature of operations and time difference between the provision of services and realization of cash and cash equivalents, the company has ascertained its operating cycle as 12 months for the purpose of current and non-current classification of assets and liabilities.

B. Use of Estimates

The preparation of financial statements required the management to make estimates and assumptions that affect the reported balance of assets and liabilities, revenues and expenses including of warranty claims and disclosures relating to contingent liabilities. The Management believes that the estimates used in the preparation of financial statements are prudent and reasonable. Future results could differ from these estimates. Any revision of accounting estimates is recognized prospectively in the current and future periods. Significant estimates used by the management in the preparation of these financial statements include provision for employee benefits, estimates of the economic useful life of plant and equipment, provision for expenses, etc.

C. Accounting Convention

The Company follows the mercantile system of accounting, recognizing income and expenditure on accrual basis. The accounts are prepared on historical cost basis and as a going concern. Accounting policies not referred to specifically otherwise, are consistent with the generally accepted accounting principles.

The following significant accounting policies are adopted in the preparation and presentation of these financial statements:

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

Sales of goods are recognized on transfer of significant risks and rewards of ownership to the buyer, which generally coincides with the delivery of goods to customers.

Sale of services is recognised as and when the services are rendered and the collectability is reasonable assured. It is consist of Franchise fees.

Revenue comprises the sale of goods, net of discount & volume rebates and related service income and includes shipping charges, cash-on-delivery (COD) charges, and franchise fees recovered from customers or franchisees. Shipping and COD charges are recognized as revenue when the related goods are dispatched or delivered, and the service obligations are completed.

Other Operating Revenue

The Company sells packing materials to certain suppliers. These materials are used by suppliers for packing finished goods supplied back to the Company. Revenue from the sale of packing materials is recognized when: Control of the packing material is transferred to the supplier; The Company has an enforceable right to payment; The amount of consideration can be measured reliably; and It is probable that economic benefits will flow to the Company.

Control is generally considered to be transferred upon delivery of the packing material to the supplier or as per agreed delivery terms.

Revenue from social media services is recognized when performance obligations are satisfied, either over time during the campaign period or at the point of delivery of agreed content. Revenue is measured at the transaction price, net of discounts and indirect taxes. Related service costs are expensed in the period in which the revenue is recognized.

2. Property, Plant and Equipment and Intangible Assets

i. Property, Plant & Equipment’s:

a) Property, Plant and Equipment are stated as per Cost Model i.e., at cost less accumulated depreciation and impairment, if any; Costs directly attributable to acquisition are capitalized until the Property, Plant and Equipment are ready for use, as intended by the management:

b) Subsequent expenditures relating to Property, Plant and Equipment are capitalized only when it is probable that future economic benefits associated with these will flow to the Company and the cost of the item can be measured reliably. Repairs & maintenance costs are recognized in the Statement of profit & Loss when incurred;

c) The cost and related accumulated depreciated are eliminated from the financial statements upon sale or retirement of the asset and the resultant gains or losses are recognized in the Statement of Profit or Loss. Assets to be disposed of are reported at the lower of the carrying value or the fair value less cost to sell;

d) Depreciation on fixed assets is calculated using the Written Down Value (WDV) method, which involves applying depreciation rates prescribed under Schedule II to the Companies Act 2013 to the carrying amount of the asset. The carrying amount is reduced each year by the amount of depreciation charged.

e) Depreciation methods, useful lives, and residual values are reviewed periodically, including at each financial year end;

The Company estimates the useful life for property, plant and equipment and intangible assets as under:

Intangible assets are stated at the consideration paid for acquisition less accumulated amortization and impairment loss if any. Intangible assets are amortized on a straight-line basis over the estimated economic life. Costs relating to software, which are acquired, are capitalized and amortized on a straight-line basis over their useful lives not exceeding Five years.

The Management periodically assesses, using external and internal sources, whether there is an indication that an asset may be impaired. An impairment loss is recognized wherever the carrying value of an asset exceeds its recoverable amount. The recoverable amount is higher of the assets net selling price and value in use, which means the present value of future cash flows expected to arise from the continuing use of the asset and its eventual disposal. An impairment loss for an asset is reversed if, and only if, the reversal can be related objectively to an event occurring after the impairment loss was recognized. The carrying amount of an asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortization or depreciation) had no impairment loss been recognized for the asset in prior years.

Projects under which assets are not ready for their intended use are disclosed under Capital Work-in-progress. Property, Plant and Equipment under construction or installation, included in capital work-in-progress are not depreciated.

Traded goods are valued at lower of cost and net realisable value. Cost includes cost of purchase and other costs included in bringing the inventories to their present location and condition.

(i) Initial Recognition

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction. (ii) Conversion Foreign currency monetary items are retranslated using the exchange rate prevailing at the reporting date. (iii) Exchange difference Exchange differences arising on the settlement of monetary items or on reporting Company monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognized as income or as expenses in the year in which they arise.

Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of a non- cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities are segregated.

Borrowing cost includes interest, amortization of ancillary cost incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur.

10. Taxation

Current income tax expense comprises taxes on income from operations in India and in foreign jurisdictions. Income tax payable in India is determined in accordance with the provisions of the Income Tax Act, 1961. Tax expense relating to foreign operations is determined in accordance with tax laws applicable in countries where such operations are domiciled.

Deferred Tax is calculated at the rates and laws that have been enacted or substantively enacted as at the Balance Sheet date and is recognized on timing difference that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets, subject to consideration of prudence, are recognized and carried forward only to the extent that they can be realized. The Company offsets deferred tax assets and deferred tax liabilities if it has a legally enforceable right and these relate to taxes on income levied by the same governing taxation laws.

Advance taxes and provisions for current income taxes are presented in the balance sheet after off-setting advance tax paid and income tax provision arising in the same tax jurisdiction for relevant tax paying units and where the Company is able to and intends to settle the asset and liability on a net basis.

11. Earnings Per Share

Basic earnings per share is computed by dividing the net profit after tax by the weighted average number of equity shares outstanding during the period. Diluted earnings per share is computed by dividing the profit after tax by the weighted average number of equity shares considered for deriving basic earnings per share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares.

The diluted potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value which is the average market value of the outstanding shares. Dilutive potential equity shares are deemed converted as of the beginning of the period, unless issued at a later date. Dilutive potential equity shares are determined independently for each period presented.

12. Provisions and Contingent Liabilities

A provision is recognized if, as a result of a past event, the Company has a present legal obligation that is reasonably estimable, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by the best estimate of the likely future outflow of economic benefits required to settle the obligation at the reporting date.

Where no reliable estimate can be made, a disclosure is made as contingent liability. A disclosure for a contingent liability is also made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made. Contingent Assets are not recognized in the financial statements since this may result in the recognition of income that may never be realized.

13. Cash and Cash Equivalents

Cash and cash equivalents comprise cash and cash on deposit with banks. The Company considers all highly liquid investments with a remaining maturity at the date of purchase of three months or less and that are readily convertible to known amounts of cash to be cash equivalents.

14. Investments

Investments that are readily realizable and intended to be held for not more than one year from the date of acquisition are classified as current investments. All other investments are classified as long-term investments. On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges such as brokerage, fees and duties.

Current investments are carried in the financial statements at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary nature in value of investment.

15. Government Grants and Subsidies

Government grants and subsidies are recognised when there is reasonable assurance that the Company will comply with the conditions attached to them and the grants / subsidy will be received. Government grants whose primary condition is that the Company should purchase, construct or otherwise acquire capital assets are presented by deducting them from the carrying value of the assets. The grant is recognised as income over the life of a depreciable asset by way of a reduced depreciation charge.

When the grant or subsidy relates to an expense item, it is recognized as income over the periods necessary to match them on a systematic basis to the costs, which it is intended to compensate.

16. Leases

Assets taken on lease by the Company in its capacity as lessee, where the Company has substantially all the risks and rewards of ownership are classified as finance lease. Such a lease is capitalised at the inception of the lease at lower of the fair value or the present value of the minimum lease payments and a liability is recognised for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost so as to obtain a constant periodic rate of interest on the outstanding liability for each year.

Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the lessor, are recognised as operating leases. Lease rentals under operating leases are recognised in the statement of profit and loss on a straight-line basis.

17. Contingencies and events occurring after the Balance Sheet date

Events that occur between balance sheet date and date on which these are approved, might suggest the requirement for an adjustment(s) to the assets and the liabilities as at balance sheet date or might need disclosure. Adjustments are required to assets and liabilities for events which occur after balance sheet date which offer added information substantially affecting the determination of the amounts which relates to the conditions that existed at balance sheet date.

18. Related Party Transactions

Related parties as defined under Accounting Standard - 18 ‘Related Party Disclosures’ have been identified based on representations made by management and information available with the Company. All transactions with related parties are in the ordinary course of business and on arms length basis.

19. Segment Reporting

As per AS -17 Segment Reporting is not applicable to the company for the reporting period.

20. Employee Benefits

(i) Short Term Employee Benefits

The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognised as an expense during the period when the employees render the services. These benefits include performance incentive and compensated absences.

(ii) Post-Employment Benefit

Defined Contribution Plans

A defined contribution plan is a post-employment benefit plan under which the Company pays specified contributions to a separate entity. The Company makes specified monthly contributions towards Provident Fund. The Company’s contribution is recognised as an expense in the Profit and Loss Statement during the period in which the employee renders the related services.

Defined Benefit Plans

Gratuity liability valuation on projected unit credit (PUC) method at the end of each year. Actuarial gains/losses are immediately taken to the statement of profit and loss and are not deferred. Accumulated gratuity which is expected to be utilized within the next 12 months, is treated as short-term employee benefit and which is expected to be carried forward beyond 12 months, as long term employees benefit for measurement purpose.

(Rs In Lakhs)

21. Extraordinary items, Exceptional items, Prior period items & changes in accounting policies

a) Income or expenses that arise from events or transactions that are clearly distinct from the ordinary activities of the Company are classified as extraordinary items. Specific disclosure of such events/transactions is made in the financial statements. Similarly, any external event beyond the control of the Company, significantly impacting income or expense, is also treated as extraordinary item and disclosed as such.

b) On certain occasions, the size, type or incidence of an item of income or expense, pertaining to the ordinary activities of the Company, is such that its disclosure improves an understanding of the performance of the Company. Such income or expense is classified as an exceptional item and accordingly disclosed in the notes to accounts. c) There were no changes in accounting policies requiring adjustments in the Restated Financial Statements, except for the accounting of retirement benefits in accordance with AS-15 (Revised) Employee Benefits and deferred tax in accordance with AS-22 Accounting for Taxes on Income. During the restatement, the Company has accounted for retirement benefits based on an actuarial valuation certificate and recognized deferred tax as per the requirements of AS-22.

II NOTES TO RESTATED SUMMARY STATEMENTS:

A disclosure for a contingent liability reported in the notes to restated financial restatements when there is a possible obligation that may, require an outflow of the Companys resources. Refer Annexure 30.

Amount due to entities covered under Micro, Small and Medium Enterprises as defined in the Micro, Small, Medium Enterprises Development Act, 2006, have been reported to the extent of information memorandum received from the suppliers.

Related party transactions are already reported as per AS-18 of Companies (Accounting Standards) Rules, 2006, as amended, in the Annexure - 32 of the enclosed financial statements.

Appropriate adjustments have been made in the restated financial statements, whenever required, by a reclassification of the corresponding items of assets, liabilities, and cash flow statement, in order to ensure consistency and compliance with requirements of Schedule VI and Accounting Standards.

The Company evaluated the carrying amounts of property, plant and equipment, investments, inventories, loans and advances, receivables and other current assets. In developing the assumptions relating to the possible future uncertainties, the Company, as at the date of approval of these Restated financials has used internal and external sources on the expected future performance of the Company and management expects the carrying amount of these assets will be recovered and sufficient liquidity is available to fund the business operations for at least another 12 months. Due to any unforeseen circumstances the final impact on the Company’s assets in future may differ from that estimate as at the date of approval of these Restated Financials.

All other contractual liabilities connected with business operations of the Company have been appropriately provided for in the Restated Financial Statements.

There have been no audit qualifications/observations in Statutory Auditor’s Report F.Y. 2025-26 till 31st December, 2025 F.Y 2024-25, 2023-24, 2022- 23, which requires adjustments in restated financial statements.

Amounts in the financial statements are reported in Indian Rupees in lakhs and rounded off to second digit in decimal. Figure in brackets indicate negative values.

RECONCILIATION OF RESTATED PROFIT:

Reason for Change

RECONCILIATION OF EQUITY AND RESERVES:

Explanatory notes to the above restatements made in the audited financial statements of the Company for the respective year

Reason for Change

Our Result of Operations

The following discussion on results of operations should be read in conjunction with the Restated Financial Statements for the nine month period ended 31st December 2025 and Fiscals 2025, 2024 and 2023.

Key Components of Income and Expenses

We report on our income and expenditure in the following manner:

Total Income:

Our total income comprises of revenue from operations and other income.

Revenue from operations:

Revenue from operations mainly consists of revenue from sales of products which include cosmetic and beauty products

The following table sets forth the bifurcation of revenue (product-wise) for the nine months period ended December 2025 and for the fiscal years 2025, 2024 and 2023.

(Rs in Lakhs)

Also, Revenue from operations includes sale of services comprising only of franchise fees. Other operating revenue includes income from sales of packing material and marketing support services.

Revenue from operations increased consistently from FY 2022 23 to FY 2023 24 and FY 2024 25 and remained strong for the period ended December 31, 2025. Revenue increased from 2,237.85 lakhs in FY 2022 23 to 3,681.95 lakhs in FY 2023 24 and further to 4,779.81 lakhs in FY 2024 25. For the period ended December 31, 2025, revenue from operations stood at 5,739.29 lakhs. The growth in revenue over these periods was primarily attributable to higher sales volumes across product categories, expansion across multiple marketplaces and sales channels, scaling of franchise operations, increased advertisement and marketing initiatives leading to enhanced brand visibility and customer acquisition, improved pricing realisations, and expansion of the Company’s sales and distribution network, resulting in improved market penetration and sustained revenue growth.

The post-discount sales in Fiscal 2025 are attributable to the Company’s strategic pricing approach adopted to drive higher e-commerce sales volumes. Post-sale discounts are offered to a key e-commerce operator, which enables the operator to extend additional discounts to end customers, thereby stimulating demand. Accordingly, post-discount sales increased from 137.64 lakhs (4.09%) in Fiscal 2024 to 256.34 lakhs (5.49%) in Fiscal 2025, primarily in line with the growth in overall sales and reflecting the Company’s focus on expanding its market reach through competitive pricing strategy but for the nine months period ended December, 2025 it decreased to 153.91 lakhs (2.77%) indicating growing brand image and recall value.

Other Income:

Other income primarily comprises of Interest on Fixed Deposit and Income Tax Refund, Foreign Exchange gain/ (loss), Profit on Sale of Investment and Miscellaneous (Other) Income.

Total Expenses:

Total expenses consist of operating costs like Purchases of Stock-in-Trade, Change in Inventories of Stock-in-Trade and Goods in transit, Employee benefit expenses, Finance costs, Depreciation and Amortization Expenses and Other Expenses.

Purchases of Stock-in-Trade:

Purchases of Stock-in-Trade comprise purchases of goods from indigenous sources and imports.

Change in inventories of stock-in-trade and Goods in transit:

Changes in inventories of stock-in-trade and goods in transit between opening and closing dates of a reporting period.

Employee benefits expense:

Employee benefit expense primarily comprises of Employees Salary Expenses, Staff Welfare Expenses, Director’s Remuneration, Gratuity expense and Contribution to PF, ESIC & Labour welfare fund.

Finance Costs:

Our finance cost includes Interest on Working capital loan, Term loan, Unsecured loan & Others, and Bank and Processing charges.

Depreciation and Amortization Expenses:

Depreciation includes depreciation on tangible assets such as Furniture & Fixtures, Computer, Office Equipment, Vehicles, Plant & Machinery, Building, Solar Panel and intangible assets such as Computer Software.

Other Expense:

Other Expenses includes Auditors’ Remuneration (Audit Fees and Other related expenses), Advertisement & Promotion expense, Bad Debts, Commission, Insurance, Interest On Import Duty, Interest & Penalty On Statutory Dues, Interest to MSME, Power and Fuel, Legal & Professional Fees, Rent, Rates and Taxes, ROC fees Selling & Distribution expenses, IT Software & Telephone expenses, Travelling expenses, Miscellaneous expenses, Exhibition and Events, Freight and Courier expenses, Repair & Maintenance other, Website expense.

FINANCIAL PERFORMANCE HIGHLIGHTS FOR THE NINE MONTHS PERIOD ENDED 31st December, 2025:

Total Income:

Total income for the nine months period ended December 31, 2025, stood at Rs. 5,745.10 lakhs. The total income consists of revenue from operations and other income.

Revenue from Operations:

During the nine months period ended December 31, 2025, the Company has total revenue of Rs. 5,745.10 lakhs, comprising Revenue from Operations of Rs. 5,739.29 lakhs and Other Operating Revenue of Rs. 5.82 lakhs. Revenue from Operations was primarily driven by sales of products amounting to 5,706.22 lakhs, discounts of Rs. 153.91lakhs, resulting in net sale of products of Rs. 5,552.30 lakhs, along with sales of services (including franchise fees) amounting to Rs. 16.00 lakhs. Other Operating Revenue mainly comprised sale of packing material amounting to Rs. 170.98 lakhs.

Other Income:

During the nine months period ended December 31, 2025, the Other Income of our Company stood at Rs. 5.82 lakhs which primarily comprise Foreign Exchange gain/ (loss), Profit on sale of investment and Other Miscellaneous (Other) Income.

Total Expenses:

Total expenses consist of operating costs like Purchases of Stock-in-Trade, Change in Inventories of Stock-in-Trade and Goods in transit, Employee benefit expenses, Finance costs, Depreciation and Amortization Expenses and Other Expenses. During the nine months period ended December 31, 2025, the total expenses of our Company stood at Rs. 4,529.43 lakhs.

Purchases of Stock-in-Trade:

During the nine months period ended December 31, 2025, the Cost of Purchases of stock-in-trade of our Company stood at Rs. 2,176.86lakhs.

Change in inventories of Stock-in-Trade and Goods in transit:

During the nine months period ended December 31, 2025, the Change in inventories of Stock-in-Trade and Goods in transit at Rs. (138.70) lakhs.

Employee benefits expense:

During the nine months period ended December 31, 2025, the Employee Benefit Expenses of our Company stood at Rs. 473.47 Lakhs. The components of the Employee Benefit Expenses are Employees Salary Expenses, Staff Welfare Expenses, Director’s Remuneration, Gratuity Expense Contribution to PF, ESIC & Labour welfare fund.

Finance Costs:

During the nine months period ended December 31, 2025, the finance costs of our Company stood at Rs. 57.09 lakhs. Our finance cost includes Interest on Working capital loan, Term loan, Unsecured loan, and Bank and Processing charges.

Depreciation and Amortization Expenses:

During the nine months period ended December 31, 2025, the Depreciation on Property Plant & Equipment and Amortization of Intangible Assets of our Company stood at Rs. 67.02 lakhs.

Other Expenses:

Other expenses for the nine months period ended December 31, 2025, were Rs. 1,893.68 lakhs, including Auditors’ Remuneration (Audit Fees and Other related expenses), Advertisement & Promotion expense, Bad Debts, Commission, Insurance, Interest On Import Duty, Interest & Penalty On Statutory Dues, Interest on MSME, Power and Fuel, Legal & Professional Fees, Rent, Rates and Taxes, ROC Fees, Selling & Distribution expenses, IT Software & Telephone expenses, Travelling expenses, Miscellaneous expenses, Exhibition and Events, Freight and Courier expenses, Repair & Maintenance other, Website expense.

Restated Profit before tax:

The Company reported Restated Profit Before Tax (PBT) for the nine months period ended December 31, 2025, of Rs. 1,215.67 Lakhs.

Restated profit after tax:

The Company reported Restated Profit After Tax (PAT) for the nine months period ended December 31, 2025, of Rs. 906.18Lakhs.

FINANCIAL YEAR ENDED 31st MARCH 2025 COMPARED TO FINANCIAL YEAR ENDED 31st MARCH 2024:

Total Income:

The total income for FY 2024-25 stood at Rs. 4,793.88 lakhs, compared to Rs. 3,693.45 lakhs in FY 2023-24, reflecting a growth of 29.79%. This increase was primarily driven by higher Revenue from Operations and Other Income.

Revenue from Operations:

In FY 2024-25, the Revenue from Operations was Rs. 4,779.81 lakhs, showing a significant increase from Rs. 3,681.95 lakhs in FY 2023-24, reflecting an increase of 29.82%. This growth was primarily attributed to increased net sales of products from Rs. 3,364.19 lakhs in FY 2023-24 to Rs. 4,670.04 lakhs in FY 2024-25, reflecting a growth of approximately 38.82%. However, sales of services in franchisee fees declined from 20.34 lakhs in FY 2023-24 to 18.20 lakhs in FY 2024-25. Further, Other Operating Revenue decreased from 297.41 lakhs in FY 2023-24 to 91.56 lakhs in FY 2024-25.

Other Income:

Other income for FY 2024-25 stood at Rs. 14.07 lakhs, compared to Rs. 11.51 lakhs in FY 2023-24, marking a increase of 22.33%. The increase was primarily due to increase in Foreign Exchange gains (Rs. 12.95 lakhs in FY 2024-25 vs. Rs.10.78 lakhs in FY 2023-24) and increase in Miscellaneous (Other) Income (Rs. 1.12 lakhs in 2024-25 vs. Rs. 0.55 lakhs in 2023-24).

Total Expenses:

Total expenses for FY 2024-25 were Rs. 4,350.43 lakhs, compared to Rs. 3,655.14 lakhs in FY 2023-24, reflecting an increase of 19.02%. This increase was due to increase in business operations of the Company resulting in higher Purchase of Stock in Trade, Finance Cost, Depreciation and Amortization Expenses and Other Expenses which includes majorly Advertisement and Promotion, Freight and Courier and Commission expense.

Purchases of Stock in Trade

The Purchase of Stock-in-Trade increased to Rs. 2,205.40 lakhs in FY 2024-25 from Rs. 1,909.36 lakhs in FY 2023-24, representing an increase of 15.50%. Such increase was due to higher purchase of goods in alignment with the growth of sales, which increased by 29.82% during the year.

Change in inventories:

Our Company has incurred Rs. (264.16) lakhs as Change in inventories of stock-in-trade and goods in transit during FY 2024-25 as compared to Rs. (81.52) lakhs in FY 2023-24.

Employee Benefits Expense:

Our Company has incurred Rs. 533.88 lakhs as Employee Benefits Expense during the FY 2024 25 as compared to Rs. 578.76 lakhs in FY 2023 24. The decrease was primarily attributable to a reduction in employee salary expenses, which declined from Rs. 486.15 lakhs in FY 2023 24 to Rs. 403.36 lakhs in FY 2024 25. This reduction was partially offset by an increase in staff welfare expenses, which rose from Rs. 0.27 lakhs to Rs. 11.70 lakhs, and an increase in Director’s remuneration from Rs. 65.90 lakhs in FY 2023 24 to Rs. 100.50 lakhs in FY 2024 25. Gratuity expenses also increased marginally from Rs. 11.92 lakhs to Rs. 12.69 lakhs during the same period. Further, contributions to provident funds, ESIC, and other funds decreased from Rs. 14.52 lakhs in FY 2023 24 to Rs. 5.63 lakhs in FY 2024 25.

Finance Costs:

Our Company has incurred Rs. 119.57 lakhs as finance cost during FY 2024-25 as compared to Rs. 86.82 lakhs in FY 2023-24 reflecting an increase of 37.73%. This incline was primarily due to increase in interest on unsecured loans, from Rs.48.88 lakhs in FY 2023-24 to Rs. 77.95 lakhs in FY 2024-25 and increased Bank & Processing charges from 9.61 lakhs in FY 2023-24 to 18.02 lakhs in FY 2024-25.

Depreciation and Amortization Expenses:

Depreciation for the financial year 2024-25 stood at Rs. 64.04 lakhs as against Rs. 53.42 lakhs during FY 2023-24. The increase in depreciation was around 19.89%, which was primarily due to purchase of Furniture & Fixtures, Vehicles, Computer, Solar Panel and Office Equipment.

Other Expenses:

Our Company incurred Rs. 1,691.70 lakhs in other expenses during FY 2024-25, compared to Rs. 1,108.30 lakhs in FY 2023-24, an increase of 52.64%. This increase was driven primarily by rise in the following costs:- Advertisement & Promotion Expense, Bad Debts, Commission, Interest & Penalty on Statutory dues, Rent, Rates and Taxes, Interest to MSME, IT Software & Telephone expenses, Travelling expenses, Miscellaneous expenses, Freight and Courier, Repair & Maintenance and Power and Fuel expense. However, there was a decline in some expenses like Insurance, Legal & Professional fees, Selling and Distribution Expenses and Website Expenses.

Restated Profit Before Tax:

Net Profit Before Tax (PBT) for FY 2024-25 increased to Rs. 443.45 lakhs as compared to Rs. 38.32 lakhs in FY 2023-24. Consequently, the PBT margin improved from 1.04% to 9.25% of Total Income. This significant growth was primarily driven by the factors mentioned above.

Restated Profit for the year:

As a result of the foregoing factors, our Profit After Tax (PAT) increased from 0.74% to 6.89% of Total Income, rising from 27.43 lakhs in FY 2023 24 to 330.29 lakhs in FY 2024 25.

FINANCIAL YEAR ENDED 31st MARCH 2024 COMPARED TO FINANCIAL YEAR ENDED 31st MARCH 2023: Total Income:

The total income for FY 2023-24 stood at Rs. 3,693.45 lakhs, compared to Rs. 2,243.89 lakhs in FY 2022-23, reflecting a growth of 64.60%. This increase was primarily driven by higher Revenue from Operations.

Revenue from Operations:

In FY 2023-24, the revenue from operations was Rs. 3,681.95 lakhs, showing a significant increase from Rs. 2,237.85 lakhs in FY 2022-23, reflecting an increase of 64.53%. This growth was primarily attributed to significant increase in net Sale of Products from Rs. 1,966.16 lakhs in FY 2022-23 to Rs. 3,364.19 lakhs in FY 2023-24, reflecting a growth of approximately 71.11%. Additionally, Sale of services increased from Rs. 7.63 lakhs in FY 2022-23 to Rs. 20.34 lakhs in FY 2023-24 and increase in Other operating revenue from Rs. 264.07 lakhs in FY 2022-23 to Rs. 297.41 lakhs in FY 2023-24.

Other Income:

Other income for FY 2023-24 stood at Rs. 11.51 lakhs, compared to Rs. 6.04 lakhs in FY 2022-23, marking a increase of 90.59% as compared to previous year. The increase was primarily due to increase in Foreign Exchange gain (Rs. 10.78 Lakhs in FY 2023-24 vs. Rs. 5.69 Lakhs in FY 2022-23) Miscellaneous (Other) income increased to Rs. 0.55 lakhs in FY 2023-24 from Rs. 0.29 Lakhs in FY 2022-23.

Total Expenses:

Total expenses for FY 2023-24 were Rs. 3,655.14 lakhs, compared to Rs. 2,150.55 lakhs in FY 2022-23, reflecting a rise of 69.96%. This increase was due to increase in business operations of the Company resulting into higher Purchase of Stock-in-Trade, Employee Benefits expense, Depreciation, Finance Cost and Other expenses.

Purchase of Stock-in-Trade:

The Purchase of Stock-in-Trade increased to Rs. 1,909.36 lakhs in FY 2023-24 from Rs. 1,469.10 lakhs in FY 2022-23, representing an increase of 29.97%. Such increase was due to higher purchase of goods in alignment with the growth of sales.

Change in inventories of Stock-in-Trade and Goods in transit:

Our Company has incurred (Rs. 81.52) Lakhs as Change in inventories of Stock-in-Trade and Goods in transit during FY 2023-24 as compared to (Rs. 308.97) Lakhs in FY 2022-23.

Employee benefits expense:

Our Company has incurred Rs. 578.76 lakhs as Employee benefits expense during FY 2023-24 as compared to Rs. 386.80 Lakhs in FY 2022-23. The increase was due to increase in (i) Employees Salary Expenses from Rs. 289.71 lakhs in FY 2022-23 to Rs. 486.15 lakhs in the FY 2023-24 and (ii) Contribution to funds such ESIC, PF, Labour welfare fund from Rs. 3.32 lakhs in FY 2022-23 to Rs. 14.52 lakhs in FY 2023-24. (iii) Gratuity expense from Rs. 1.87 lakhs in FY 2022-23 to 11.92 lakhs in FY 2023-24.

Finance Cost:

Our Company has incurred Rs. 86.82 lakhs as Finance Cost during FY 2023-24 as compared to Rs. 35.00 Lakhs in FY 2022-23. The increase was due to increase in: Interest on Working Capital Loan from Rs. 3.84 Lakhs in FY 2022-23 to Rs. 26.85 Lakhs in FY 2023-24, Interest on Unsecured loans from Rs. 21.02 Lakhs in FY 2022-23 to Rs. 48.88 Lakhs in FY 2023-24, Interest on Term Loan from nil in FY 2022-23 to Rs. 1.48 lakhs in FY 2023-24.

Depreciation and Amortization Expenses:

Depreciation for FY 2023-24 stood at Rs. 53.42 lakhs as against Rs. 21.48 lakhs during FY 2022-23. The increase in depreciation was of 148.71% which was due to purchase of Furniture, Computer, Office Equipment, Vehicles, Land, Plant & Machinery and Building.

Other Expenses:

Our Company incurred Rs. 1,108.30 lakhs in Other Expenses during FY 2023-24, compared to Rs. 547.13 lakhs in FY 2022-23, an increase of 102.56%. This rise was driven by higher expenses in Advertisement & Promotion, Commission, Interest & Penalty on Statutory dues, Insurance, Interest on Import Duty, Interest & Penalty on Statutory Dues, Power & Fuel, Legal & Professional fees, Rent, Rates and Taxes, Selling & Distribution, IT software & telephone expense, Travelling and Freight & Courier expense.

Restated Profit before Tax:

Net Profit Before Tax (PBT) for FY 2023-24 decreased to Rs. 38.32 lakhs as compared to Rs. 93.34 lakhs in FY 2022-23, marking a decrease of 58.95%. This decline was primarily driven by the factors mentioned above.

Restated Profit for the year:

As a result of the foregoing factors, our Profit After Tax (PAT) decreased by 60.40%, declining from Rs. 69.28 lakhs in FY 2022-23 to Rs. 27.43 lakhs in FY 2023-24.

Cash Flows and Cash and Cash Equivalents:

Operating Activity:

For the nine months period ended December 31, 2025

Our Net cash generated from operating activities was Rs. 597.30 lakhs for nine months period ended December 31, 2025. While our net Profit Before Tax was Rs. 1,215.67 lakhs, we had an operating profit before working capital changes of Rs. 1,338.60 lakhs for nine months period ended 31st December 2025 which was primarily due to Finance Cost of Rs. 57.09 lakhs, Depreciation of Rs. 67.02lakhs and Provision for Gratuity of Rs. (0.86) lakhs, Provision for MSME of Rs. 2.00 lakhs. Our changes in working capital for the nine months period ended 31 December 2025 primarily consisted of a increase in trade receivables by Rs. (189.32) lakhs, increase in inventories by Rs. (138.70) lakhs, increase in short term loans and advances by Rs. (116.72)lakhs, decrease in Other non-current assets by Rs. 2.24 lakhs, increase in Trade payables by Rs. (74.86) lakhs and increase in Other current liabilities by Rs. 96.66 lakhs. Our income taxes paid was Rs. 320.60 lakhs for nine months period ended 31 December 2025.

FY 2024-25

Our Net cash generated from operating activities was Rs. 313.97 lakhs for FY 2024-25. While our net Profit Before Tax was Rs. 443.45 lakhs, we had an operating profit before working capital changes of Rs. 657.49 lakhs for FY 2024-25 which was primarily due to Finance Cost of Rs. 119.57 lakhs, Depreciation of Rs. 64.04 lakhs, Bad Debts of Rs. 17.73 lakhs and Provision for Gratuity of Rs. 12.69 lakhs. Our changes in working capital for FY 2024-25 primarily consisted of an increase in trade receivables by Rs. 232.77 lakhs, increase in inventories by Rs. 236.53 lakhs, increase in Short term loans and advances by Rs. 76.69 lakhs, increase in Other non-current assets by Rs. 4.93 lakhs, increase in Trade payables by Rs. 260.88 lakhs and increase in Other current liabilities by Rs. 20.97 lakhs. Our income taxes paid was Rs. 74.44 lakhs for FY 2024-25.

FY 2023-24

Our Net cash generated from operating activities was Rs. (Rs. 163.62) lakhs for FY 2023-24. While our net profit before tax was Rs. 38.32 lakhs, we had an operating profit before working capital changes of Rs. 190.47 lakhs for FY 2023-24 which was primarily due to finance Cost of Rs. 86.82 lakhs, depreciation of Rs. 53.42 lakhs and provision for gratuity of Rs. 11.92 lakhs. Our changes in working capital for FY 2023-24 primarily consisted of an increase in trade receivables by Rs. 260.86 lakhs, increase in inventories by Rs. 109.15 lakhs, decrease in Short term loans and advances by Rs. 65.26 lakhs, increase in Other non-current assets by Rs. 4.91 lakhs, decrease in Trade payables by Rs. 132.14 lakhs and increase in Other current liabilities by Rs. 97.27 lakhs. Our income taxes paid was Rs. 9.55 lakhs for FY 2023-24.

FY 2022-23

Our Net cash generated from operating activities was Rs. (Rs. 526.67) lakhs for FY 2022-23. While our net Profit Before Tax was Rs. 93.34 lakhs, we had an operating profit before working capital changes of Rs. 151.64 lakhs for FY 2022-23 which was primarily due to Finance Cost of Rs. 35.00 lakhs, Depreciation of Rs. 21.48 lakhs and Provision for Gratuity of Rs. 1.87 lakhs. Our changes in working capital for FY 2022-23 primarily consisted of an increase in trade receivables by Rs. 208.56 lakhs, increase in inventories by Rs. 308.97 lakhs, increase in Short term loans and advances by Rs. 145.95 lakhs, increase in Other non-current assets by Rs. 5.83 lakhs, increase in Trade payables by Rs. 32.09 lakhs and decrease in Other current liabilities by Rs. 13.50 lakhs. Our income taxes paid was Rs. 27.61 lakhs for FY 2022-23.

Investing Activity:

For the nine months period ended December 31, 2025

Our Net cash outflow in investing activities was (Rs. 167.33) lakhs for the period ended 31 December 2025, primarily comprising of increase in payment for purchase of fixed assets of Rs. 144.98 lakhs and increase in capital advance for assets of Rs. 25.00 lakhs, Payment for purchase of shares of Rs. 19.35 lakhs, receipt on sale of shares of Rs. 22.00 lakhs

FY 2024-25

Our Net cash outflow in investing activities was (Rs. 99.86) lakhs for FY 2024-25, primarily comprising of increase in payment for purchase of fixed assets of Rs. 106.14 lakhs and decrease in capital advance for assets of Rs. 6.28 lakhs.

FY 2023-24

Our Net cash outflow in investing activities was (Rs. 183.75) lakhs for FY 2023-24, primarily comprising of increase in payment for purchase of fixed assets of Rs. 177.47 lakhs and increase in capital advance for assets of Rs. 6.28 lakhs.

FY 2022-23

Our Net cash outflow in investing activities was (Rs. 81.42) lakhs for FY 2022-23, primarily comprising of increase in payment for purchase of fixed assets of Rs. 81.47 lakhs and interest income on FD of Rs. 0.06 lakhs.

Financing Activity:

For the nine months period ended December 31, 2025

Our Net cash flow used in financing activities was Rs. (467.34)lakhs for the nine months period ended December 31, 2025, primarily comprising of repayment of long term borrowings 97.69 lakhs, repayment of short term borrowings of Rs. 315.67 lakhs, and interest paid of Rs. 53.98 Lakhs.

FY 2024-25

Net cash flow used in financing activities was (Rs. 148.42) lakhs for FY 2024-25, primarily comprising of repayment of long-term borrowings (Rs. 29.12) lakhs, proceed of short-term borrowings of Rs. 0.27 lakhs, and interest paid of (Rs. 119.57) Lakhs.

FY 2023-24

Net cash flow used in financing activities was Rs. 319.18 lakhs for FY 2023-24, primarily comprising of proceeds from long term borrowings Rs. 94.85 lakhs, proceeds from short term borrowings of Rs. 311.15 lakhs, and interest paid of (Rs. 86.82) Lakhs.

FY 2022-23

Net cash flow used in financing activities was Rs. 612.11 lakhs for FY 2022-23, primarily comprising of proceeds from shares issued during the year of Rs. 405.77, proceeds from long borrowings Rs. 179.34 lakhs, proceed from short borrowings of Rs. 62.01 lakhs, along with interest paid of (Rs. 35.00) Lakhs.

Details of change in the Revenue, EBITDA and PAT year on year are as below:

(Rs. in lakhs)

Rationale for increase/ decrease in Revenue, EBITDA and PAT from F.Y 2022-23 to F.Y 2023-24 to F.Y 2024-25:

EBITDA increased from Rs. 167.05 lakhs in FY 2023 24 to Rs. 612.99 lakhs in FY 2024 25, and the EBITDA margin improved to 12.82% from 4.54%, primarily due to growth in Revenue from Operations and a reduction in costs. EBITDA increased from Rs. 143.78 lakhs in FY 2022 23 to Rs. 167.05 lakhs in FY 2023 24; however, the EBITDA margin declined to 4.54% from 6.42%, primarily due to an increase in finance costs and depreciation.

PAT margin improved to 6.91% in FY 2024 25 from 0.74% in FY 2023 24. The PAT margin declined to 0.74% in FY 2023 24 from 3.10% in FY 2022 23, primarily due to higher finance costs and depreciation.

Year-on-Year Analysis of Cost of Material Consumed in relation to Revenue from Operations:

(Rs. in lakhs)

Rationale for changes in Purchase of Stock-in-Trade as a percentage of Revenue from Operations from FY 2022-23 to FY 2023-24 and FY 2024-25 to nine-month period ended December 31, 2025: - Cost as a percentage of revenue has declined overall YoY from 1,160.13 lakhs in FY 2022-23 to 1,827.84 lakhs in FY 2023-24 to Rs. 1,941.24 lakhs and further to Rs. 2038.16 lakhs for the nine months period ended December 31, 2025, indicating improving cost efficiency is attributable to increased order volumes, better pricing negotiations with suppliers, economies of scale, and optimisation of procurement.

FY 2023 vs FY 2024

PAT decreased from 69.28 lakhs in FY23 to 27.44 lakhs in FY24 primarily due to an increase in finance costs from 35.00 lakhs to 86.62 lakhs (from 1.56% to 2.36% of revenue from operations) on account of higher borrowings during the year. Further, depreciation and amortisation expenses increased from 21.48 lakhs to 53.42 lakhs (from 0.96% to 1.45% of revenue from operations) mainly due to additions to fixed assets. Other expenses increased significantly from 547.13 lakhs to 1,108.30 lakhs (from 24.45% to 30.10% of revenue from operations), largely driven by higher advertisement and marketing expenses, which increased from 253.88 lakhs to 546.49 lakhs (from 11.34% to 14.84% of revenue from operations). The cumulative impact of higher finance costs, increased depreciation, and elevated operating expenses outweighed the growth in revenue from operations during the year, resulting in a decline in PAT. EBITDA increased from 143.78 lakhs in FY23 to 167.05 lakhs in FY24 primarily due to a significant increase in revenue from operations driven by higher sales volumes and improved scale of operations. However, the EBITDA margin declined from 6.43% to 4.54% mainly on account of increased operating expenses. Employee benefit expenses increased from 386.80 lakhs in FY23 to 578.76 lakhs in FY24 due to manpower addition to support business growth. Further, other expenses increased from 547.13 lakhs in FY23 to 1,108.30 lakhs in FY24, primarily driven by higher advertisement and marketing expenses, which increased from 253.88 lakhs to 546.49 lakhs during the year. The increase in these operating costs outweighed the benefit of higher revenues, resulting in a contraction in EBITDA margin.

FY 2024 vs FY 2025

PAT increased from 27.44 lakhs in FY24 to 330.29 lakhs in FY25 primarily due to a significant improvement in operating profitability driven by higher revenue from operations, which increased from 3,681.95 lakhs in FY24 to 4,779.81 lakhs in FY25, reflecting a growth of approximately 30%. The increase in revenue was attributable to higher sales volumes, expansion across sales channels, and improved pricing of the Company’s products. Further, the cost of goods sold, as a percentage of revenue from operations, declined during the year due to improved procurement efficiencies, including purchases made at lower rates owing to bulk ordering, which contributed to margin expansion. Employee benefit expenses decreased from 15.72% of revenue in FY24 to 11.17% in FY25, primarily due to optimisation of manpower following a rationalisation of sales promotion personnel, as the Company did not observe a commensurate impact on revenue. The number of employees dropped from 139 to 95 during the year. As a result of the above factors, the Company’s overall margins improved by approximately 6.16% during FY25, leading to a substantial increase in PAT. EBITDA increased from 167.05 lakhs in FY24 to 612.99 lakhs in FY25 primarily due to a significant improvement in operating performance driven by higher revenue from operations, which increased from 3,681.95 lakhs in FY24 to 4,779.81 lakhs in FY25, reflecting a growth of approximately 30%. The increase in revenue was attributable to higher sales volumes, expansion across sales channels, and improved pricing of the Company’s products. Further, EBITDA margins improved due to a reduction in cost of goods sold as a percentage of revenue from operations, supported by improved procurement efficiencies, including bulk purchases at lower rates. Additionally, employee benefit expenses declined from 15.72% of revenue in FY24 to 11.17% in FY25 due to manpower optimisation, particularly in sales promotion functions. However, finance costs increased from 86.82 lakhs in FY24 to 119.57 lakhs in FY25 on account of higher borrowings, and depreciation and amortisation expenses increased from 53.42 lakhs to 64.04 lakhs due to additions to fixed assets. Despite these increases, the overall improvement in operating margins resulted in a significant expansion in EBITDA during FY25.

Discussion on Balance Sheet Items

Long / Short term borrowings:

Our borrowings include term loans from banks and financial institutions, working capital loans, cash credit, business purpose loan and unsecured loan. The Company’s total long-term borrowings stood at Rs. 147.37lakhs as on December 31, 2025, compared to Rs. 245.06 lakhs as on March 31, 2025, and Rs. 274.18 lakhs in FY 2023 24. The borrowings primarily comprise secured loans from banks and financial institutions and unsecured loans from banks, financial institutions and directors & related parties. The marginal change in long-term debt reflects stable financing arrangements and consistent debt servicing. Short-term borrowings stood at 195.39 lakhs as on December 31, 2025, compared to 511.06 lakhs as on March 31, 2025, and 510.79 lakhs in FY 2023 24. The increase in short-term borrowings from 199.64 lakhs in FY 2023 to 510.79 lakhs in FY 2024 was mainly driven by higher working capital requirements in line with expansion of operations, with working capital loans increasing from 110.63 lakhs to 332.96 lakhs, supported by revenue growth from 2,237.85 lakhs to 3,681.95 lakhs and total expenses rising from 2,150.55 lakhs to 3,655.14 lakhs. Additionally, short-term borrowings increased due to a rise in the current maturity of long-term borrowings from 75.90 lakhs to 168.45 lakhs.

Trade Receivables:

Our Company’s trade receivables stood at Rs. 997.94 lakhs as on December 31, 2025, compared to Rs. 808.96 lakhs as on March 31, 2025, Rs. 593.92 lakhs as on March 31, 2024, and Rs. 333.06 lakhs as on March 31, 2023. The increase in trade Receivables is due to higher sales volumes and extended credit period to customers in line with business growth. Revenue from operations increased from 2,237.85 lakhs in FY 2023 to 3,681.95 lakhs in FY 2024 and 4,779.81 lakhs in FY 2025, and trade receivables remained broadly consistent as a percentage of revenue at approximately 15% in FY 2023, 16% in FY 2024 and 17% in FY 2025 and 17.39% for the nine months period ended December 31st, 2025. Correspondingly, receivable days increased from 54 days in FY 2023 to 59 days in FY 2024 and 62 days in FY 2025 and 48 days for the nine months period ended December 31st, 2025, which is commensurate with the increased scale of operations.

Trade Payables:

Our trade payables increased from Rs. 282.39 lakhs in FY 2022 23 to Rs. 150.25 lakhs in FY 2023 24 and further to Rs. 411.18 lakhs in FY 2024 25, with a balance of Rs. 342.30 lakhs as on December 31, 2025. The decrease in Trade payables for the period ended

December 31st, 2025 is due to timely payment to creditor The increase in FY 2025 was primarily attributable to higher procurement of stock-in-trade and components in line with increased production and sales volumes, along with extended credit terms from suppliers and timing differences in payments at the year end. Purchases increased from 1,909.36 lakhs in FY 2024 to 2,205.40 lakhs in FY 2025, supporting the higher outstanding balance. Purchases for the nine months period ended December 31st, 2025 stood at 2,176.86 lakhs. Trade payables turnover days also increased from 29 days in FY 2024 to 68 days in FY 2025, resulting in elevated year-end payables.

Inventories:

Our inventories increased from 562.12 lakhs in FY 2023 to 671.27 lakhs in FY 2024 and further to 907.80 lakhs in FY 2025 and stood at 1,046.50 lakhs as on December 31, 2025. The increase was primarily driven by higher stocking of inventory to support and anticipated demand in line with the growth in operations. Revenue from operations increased from 2,237.85 lakhs in FY 2023 to 3,681.95 lakhs in FY 2024 and 4,779.81 lakhs in FY 2025, and inventory as a percentage of revenue declined from 25% in FY 2023 to 18% in FY 2024 and 19% in FY 2025 remained at 18% for the period ended December 31st, 2025, indicating improved inventory management. Further, inventory holding days reduced from 92 days in FY 2023 to 67 days in FY 2024 and remained stable at 69 days in FY 2025 and decreased to 50 days for the nine months period ended December 31, 2025.

Short Term Loans and Advances:

Our short-term loans and advances stood at Rs. 351.09 lakhs as on December 31, 2025, compared to Rs. 234.41 lakhs as on March 31, 2025, Rs. 157.67 lakhs in FY 2023 24, and Rs. 222.93 lakhs in FY 2022 23. The significant increase in FY 2024 25 was primarily due to higher advances to suppliers amounting to Rs. 184.49 lakhs in FY 2024-25, reflecting the procurement requirements for increased production. In FY 2023 24, the balance declined to Rs. 157.67 lakhs mainly due to a reduction in advances to suppliers to Rs. 108.38 lakhs in FY 2023-24. The subsequent rise to Rs. 351.09 lakhs as of December 31, 2025, was largely attributable to higher advances to suppliers of Rs. 280.20 lakhs, loans and advances to employees amounting to Rs. 35.90 lakhs and prepaid expenses of Rs. 9.11 lakhs and preliminary expenses for IPO amounting 17.74 lakhs.

Property, Plant and Equipment:

Property, Plant and Equipment increased from 50.40 lakhs in FY 2023 to 203.20 lakhs in FY 2024 mainly due to capital expenditure incurred during the year. Additions include vehicles amounting to 45.80 lakhs, land amounting to 52.09 lakhs, office equipment and furniture amounting to Rs. 68.94 lakhs and addition of a building amounting to 23.74 lakhs. These additions resulted in an increase in the closing balance of Property, Plant and Equipment as at the end of FY 2024. It increased from 203.20 lakhs in FY 2024 to 245.34 lakhs in FY 2025 due to addition of PPE of 106.14 lakhs which mainly includes furniture and fixtures of 40.30 lakhs and vehicles of 36.18 lakhs. It further increased from 245.34 lakhs to 323.31 lakhs mainly due to addition of furniture and fixtures worth 60.59 lakhs and vehicles amounting to 67.43 lakhs.

Employee Benefit Expenses:

Employee benefit expenses increased from 386.80 lakhs in FY 2022 23 to 578.76 lakhs in FY 2023 24 due to an increase in employee strength from 93 to 139, including engagement of beauty advisors as part of business expansion, which raised salaries from 289.71 lakhs to 486.15 lakhs. As this model did not yield commensurate benefits, it was discontinued, and pursuant to workforce rationalisation and attrition, employee strength reduced to 95 as at March 31, 2025, resulting in a decline in salaries to 403.36 lakhs and employee benefit expenses to 533.88 lakhs in FY 2024 25. The reduction in employees covered under PF and LWF during FY 2024 25 was primarily due to the decrease in overall employee strength and eligible employees.

Finance Cost:

Finance costs increased from 86.82 lakhs in FY 2024 to 119.57 lakhs in FY 2025, due to increase in borrowings to support expanded operations. The rise reflects the company’s additional working capital and operational financing requirements during the period.

Other Expenses:

Other expenses increased from 547.13 lakhs in FY 2023 to 1,108.30 lakhs in FY 2024, reaching 1,691.70 lakhs in FY 2025, driven primarily by the company’s business expansion and revenue growth from 2,237.85 lakhs in FY 2023 to 4,779.81 lakhs in FY 2025. A significant contributor to this increase was advertisement expenses, which rose from 253.88 lakhs in FY 2023 to 546.49 lakhs in FY 2024 and 886.18 lakhs in FY 2025. The increase reflects the company’s focus on marketing initiatives to drive sales, enhance brand visibility, and support higher revenue. Travelling expenses also increased from 44.41 lakhs in FY 2023 to 117.40 lakhs in FY 2024 and 118.92 lakhs in FY 2025, mainly on account of sales and marketing activities, including field operations and business development efforts to expand the company’s reach. Freight and courier expenses grew from 98.95 lakhs in FY 2023 to 182.81 lakhs in FY 2024 and 280.77 lakhs in FY 2025, reflecting higher shipment volumes for goods sold through online channels, aligned with the company’s e-commerce and distribution expansion. Finally, commission expenses increased from 31.81 lakhs in FY 2023 to 54.39 lakhs in FY 2024 and 156.55 lakhs in FY 2025, primarily because commissions are revenue-linked and revenue increased substantially over the period. This demonstrates the direct correlation between sales growth and performance-linked expenses. Overall, the rise in other expenses mirrors the company’s scaling operations, enhanced sales and marketing efforts, and expanding e-commerce distribution, all contributing to sustained revenue growth.

Information required as per Item (II)(C)(iv) of Part A of Schedule VI to the SEBI Regulations:

An analysis of reasons for the changes in significant items of income and expenditure is given hereunder:

1. Unusual or infrequent events or transactions:

There have not been any unusual events or transactions on account of our business activity.

2. Significant economic changes that materially affected or are likely to affect income from continuing operations:

Other than as described in the section titled “Risk Factors” beginning on page 20 of this Red Herring Prospectus, to our knowledge there are no known significant economic changes that have or had or are expected to have a material adverse impact on revenues or income of our Company from continuing operations.

3. Known trends or uncertainties that have had or are expected to have a material adverse impact on sales, revenue or income from continuing operations:

Apart from the risks as disclosed under Section “Risk Factors” beginning on page 20 of the Red Herring Prospectus, in our opinion there are no other known trends or uncertainties that have had or are expected to have a material adverse impact on revenue or income from continuing operations.

4. Future changes in the relationship between costs and revenues:

Other than as described in the sections “Risk Factors”, “Our Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” on pages 20, 127 and 245 respectively, to our knowledge, no future relationship between expenditure and income is expected to have a material adverse impact on our operations and finances.

5. Segment Reporting:

Our company operates in a single segment, i.e. Beauty Products.

6. Status of any publicly announced New Products or Business Segment:

Except as disclosed in the Chapter “Our Business”, our Company has not announced any new product or service.

7. Seasonality of business:

Our business is not subject to seasonality. For further information, see “Industry Overview” and “Our Business” on pages 115 and 127 respectively.

8. Dependence on single or few customers:

Substantial portion of our revenue has been dependent upon few customers with which we do not have any firm commitments. For details, please refer to risk factor “We do not have long-term agreements with our customers, and our revenues are significantly dependent on recurring orders from our B2B and online customers. Any loss or reduction of business from such customers could adversely affect our results of operations and financial condition” on page 25 of this RHP.

9. Competitive conditions:

Competitive conditions are as described under the Chapter “Our Business Competition” beginning on page 128 of this Red Herring Prospectus.

10. Details of material developments after the date of last balance sheet i.e., December 31, 2025:

After the date of last Balance sheet, i.e., December 31, 2025, the following material events occurred after the last audited period: